From Stars and Stripes:
Members of the armed forces and federal employees have 12 months instead of four to pay back Social Security taxes that haven't been collected since September, officials said this week.
The so-called payroll tax deferral, which was put in place by the Trump administration for the last four months of 2020 to help workers during the coronavirus pandemic, meant that many working Americans — including service members and federal employees — had an extra 6.2% of money in each paycheck.
But starting with the first pay period of 2021, the extra money has to be paid back. And, on top of that, Social Security taxes will be collected again.
Initially, the money was supposed to be repaid by April 30 in equal amounts, which would have meant a dip in paychecks of 12.4%.
But this week, the Defense Finance and Accounting Service announced the period to collect the deferred tax has been extended until Dec. 31, 2021, meaning the money will be deducted in even amounts over 26 pay periods instead of eight. ...
This is just the Department of Defense. Are other federal agencies doing the same?
By the way, like the overwhelming majority of private employers, my law firm never stopped collecting FICA.
Wow, you are a real bad-ass for refusing to stop collecting FICA!
ReplyDeleteI know a lot of companies that still collected FICA, with their employees blessings. If you need the assistance, then great. If one (business or private) doesn't need the relief, why withhold it just to owe it later?
ReplyDeleteI am still waiting for guidance on what happens to those whose employers stopped withholding, but the employee is now retired or takes another job and the money cannot be recouped via payroll. I know several people in this position.
ReplyDeleteWhat a horrid idea for a stimulus! Knowing I would have to repay, I put my extra funds in savings rather than spending it.
ReplyDeleteanon@6:48pm,
ReplyDeleteThe agency for which those retired employees worked remains liable for collection of the taxes owed.
If the employee is in the process of retiring, they will likely have the debt adjusted from any final pay owed (such as accrued leave) and then be required to sign a repayment agreement for any remaining balance (probably as a deduction from their annuity) as a condition of retirement.
Employees already retired will almost certainly receive a debt letter from their former agency with the amount owed and instructions and deadlines (12/31/2021) for repayment. If they then fail to repay, I can see the former agency applying any applicable debt collection actions up to and including civil suits and garnishment of annuity for the debt owed plus any applicable penalties and court costs.
This is a mess that never should have happened. President Great Orange Turd truly outdid himself here.
I noticed a $190 drop in my take home pay when I got paid today. And that is AFTER I got a promotion a few weeks ago... I hate to see the paychecks of those who did not get a step increase or promotion this year.
ReplyDelete